MOSCOW, May 15, 2008 (Reuters) - Algeria has started negotiations with Russia on receiving SU-30 fighter jets in exchange for a consignment of faulty MiG-29 warplanes it returned in 2006, Interfax news agency reported on Thursday.

Long-time Russian ally Algeria sent back 15 MiG-29s for containing sub-standard parts and has now begun talks on replacing them with up to 16 SU-30s, the source at Russian arms dealer Rosoboronexport told Interfax news agency.

"The order to supply Algeria with SU-30s was received at the end of April," the source said. "Algeria wants 14 to 16 SU-30MKIs to replace the 15 MIG-29SMTs."

The source stressed that the negotiation process was "at the earliest possible stage", adding that Algeria has already received six SU-30s out of a previous order of 28.

Russia designed the SU-30 in the late 1990s and has exported the sleek, agile combat aircraft to its allies around the world, including to China, India and Indonesia.

Russia has placed increasing emphasis on its weapons industry as it tries to reassert itself after the chaotic post-Soviet 1990s. It is the number two producer behind the United States in a global arms industry which earned around $28 billion in 2006, according to a report last year.

May 16, 2008 -- Algeria launched negotiations with Russia to acquire between 12 and 16 Sukhoi-30 fighter jets to replace 15 MIG-29 fighter jets Algeria recently returned to Russia, citing poor quality, Reuters cited Russian press as saying on Thursday (May 15th). In 2006, Algeria purchased planes and other military equipment worth $6.5 billion in return for Russia's cancellation of Algeria's Soviet-era debt. According to news agency Interfax, a Russian military-industrial source said the new delivery could not be carried out before the expiration of the first contract in 2010-2011.

May 26, 2008 -- Algeria has filed a request with Russia's Rosoboronexport arms agency for a further batch of 14-16 Sukhoi Su-30MKA multirole fighters, while also demanding that Moscow compensate it for an initial $250 million payment linked to its cancelled $1.3 billion deal for 36 RSK MiG-29s.

Ordered in March 2006 under an $8 billion sale also covering the supply of 28 Su-30MKAs worth $2.5 billion and 16 Yakovlev Yak-130A trainers, the MiG-29 deal collapsed after Algeria said its first 12 MiG-29SMT single-seat fighters and three MiG-29UBT two-seat operational trainers failed to meet contractual specifications. Russia agreed in February that the aircraft could be returned to their manufacturer, but a financial settlement has yet to be finalised.

Algeria has received six Su-30MKAs since mid-2007, with another four to arrive by the end of May and six more to follow in December 2008. "If the contract for the additional batch gets signed, deliveries can start in 2011, after completion of deliveries on the initial contract in 2010", says NPK Irkut president Oleg Demchenko.

BERLIN, May 28, 2008 (RIA Novosti) - Russia will begin deliveries of new Yak-130 combat trainers to Algeria in January 2009, the plane's manufacturer said on Wednesday.

"We have a contract with Algeria to supply 16 aircraft," Oleg Demchenko, head of Russia's Irkut aircraft-manufacturing corporation, said at the Berlin Air Show ILA2008. "We are planning to start deliveries in January 2009."

He said Irkut had secured orders for a total of 150 Yak-130s from other countries and the company planned to gain 50% of the global market for combat trainers after 2010.

"This market has great potential because many countries are due to start a complete overhaul of their fleets of combat trainers and the demand for new planes may be as high as 2,500 aircraft," Demchenko said.

"I am sure that we will be able to secure half of this market because our plane is superior to any modern aircraft of its type," the official said.

The Yak-130 single-seat aircraft is a trainer for fourth and fifth generation fighters that can be also used as a light strike aircraft. With a production line launched in May 2003, the plane is also marketed for export.

It is a highly maneuverable plane with an extended range of about 2,000 kilometers (1,250 miles) and a maximum speed of 1,060 km/h (600 m/h) in level flight. It can carry a payload of up to 3,000 kg (6,600 pounds), consisting of a variety of Russian and Western developed weapons.

Russia's Air Force is planning to commission about 200 Yak-130s to equip four air regiments in the future.

BERLIN, May 28, 2008 (RIA Novosti) - Russia is prepared to offer Algeria new MiG-35 Fulcrum fighter aircraft to replace the MiG-29 Fulcrum aircraft due to be supplied under a contract terminated earlier this year, the MiG Corp. CEO said Wednesday.

"We are currently in negotiations on delivering our fighter aircraft, including MiG-35s, to Algeria," Anatoly Belov said.

Algeria has requested that Russia deliver between 14 and 16 additional Su-30 Flanker fighters in exchange for the MiG-29s.

Russian arms export monopoly Rosoboronexport signed a $1.3-bln contract to deliver 29 single-seater MiG-29SMT fighters and six two-seater MiG-29UB fighters to Algeria in March 2006 as part of an $8 billion military-technical cooperation agreement.

After receiving 15 MiG fighters, Algeria refused further deliveries in May 2007 and froze all payments with Russia in October 2007. Algeria claimed the MiG-29s were of "inferior quality" and demanded that Moscow take back all the fighters delivered.

The aircraft were eventually returned to Russia in April this year and following additional tests could go in service with the Russian Air Force.

Under a 2006 contract, worth about $2.5 billion, the Irkut corporation is supposed to deliver a total of 28 Su-30MKA fighters to Algeria until 2010. The company has supplied six aircraft so far.

The Irkut Corporation, part of Russia's United Aircraft Corporation (UAC), created in 2006, manufactures variants of the famed Su-30MK for India, Algeria, and Malaysia.